Blockchain Tokenization Is the Future of the Art World
Although it first entered the public consciousness in this context, blockchain technology is not just for cryptocurrencies. It is also applicable to industries that have been around for centuries, such as banking, real estate investing, and art collecting. In fact, tokenization using blockchain can benefit everyone involved in the art world, from collectors of artwork and patrons of artists to the artists themselves to people who appreciate art but would not otherwise have had the financial means to participate in the buying and selling of artwork. Talk to your lawyer about how using blockchain can make your pursuits in the art world stress-free and lucrative.
How Does Tokenization Work?
A token is a string of numbers, a digital identification code of sorts, that identifies a digital or offline asset; think of it as a social security number for a painting. Without blockchain technology, then several parties jointly owning a valuable piece of artwork tends to involve time-consuming negotiations and plenty of mistrust. With tokenization, shares of ownership of the valuable piece of art can have their own tokens. Blockchain technology is almost impenetrably secure, and the record of its transactions is indelible and unfalsifiable. This means that blockchain technology makes it easier and much less risky to buy and sell fractional ownership in a valuable piece of artwork, or any valuable asset, for that matter.
Everyone Wins When Blockchain Enters the Art World
Blockchain tokenization offers benefits and protection to virtually all stakeholders in the art world. Here is how various actors in the art trade can benefit from tokenization:
Artists - Because blockchain records are transparent and impossible to falsify, artists are not vulnerable to getting scammed by unscrupulous buyers who buy the artist’s work for a pittance and sell it for a huge markup. Artists who use blockchain smart contracts to sell their work have an unfalsifiable record of the legally binding agreement.
Collectors and Patrons – In the art world as in other sectors, blockchain tokenization eliminates intermediaries and middlemen of all sorts. Buyers can deal directly with the artist, and both can see the blockchain transaction records and be sure that the other party is being honest.
Art Enthusiasts – Many people would love art and would love to buy artwork but simply do not have the means to buy sought-after pieces. If you can only afford one percent of a Van Gogh, blockchain tokenization enables you to buy just that. Even better, buying and selling tokens is simple and risk-free, and it is easy to collect distributions on your ownership interest. This means that tokenization will enable many more people to buy artwork or at least shares of it than we’re able to do so before blockchain.
Find Out More About the Legal Issues of Investing in Art
Blockchain technology makes investing in art more accessible and less risky. Before you make a big investment, though, you should discuss the decision and its possible consequences with your lawyer, especially if you are new to the art world.
CONTACT OUR OFFICE TODAY: